Cryptocurrency: The ED is investigating several crimes related to cryptocurrencies; Rs 953 crore proceeds withdrawn: FM
She answered a question in Lok Sabha about whether the government was aware of the use of cryptocurrencies for money laundering.
“… in accordance with FEMA, Rs 289.28 crore worth of assets were confiscated … and produce a notice of reasons cryptocurrency An exchange of Zanmai Labs Pvt Ltd, known as WazirX, and its directors under FEMA for crypto-currency transactions worth 2,790.74 crore has also been released,” she said. Action against WazirX was taken by the Enforcement Administration (ED) in 2021.
The finance minister also informed parliament that public notices were distributed by the Reserve Bank of India (RBI) warning people about cryptocurrencies.
“The RBI warned users, holders and traders of virtual currencies (VC) in public notices dated December 24, 2013, February 1, 2017 and December 05, 2017 that transactions with virtual currencies are associated with potential economic, financial, operational legal, customer protection and security risks,” she noted in her response.
“The RBI, see its circular dated 31 May 2021, has also recommended that its regulated entities continue to conduct customer due diligence procedures for venture capital transactions in accordance with the regulations governing Know Your Customer (KYC) standards, anti-money laundering ( AML), combating the financing of terrorism (CFT), obligations under the Prevention of Money Laundering Act (PMLA) 2002, etc.,” she added.
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Notably, last week, the Treasury Department tightened the definition of the Money Laundering Prevention Act (PMLA) and included cryptocurrencies in the definition of the money laundering law. At the same time, crypto exchanges and intermediaries dealing with virtual digital assets will now have to perform KYC of their customers and platform users. Under the amendments, entities dealing with virtual digital assets (VDA) will now be considered “reporting entities” under the PMLA.
Entities involved in the exchange between VDA and fiat currencies, or the transfer of VDA or the holding and management of VDA, and participation in financial services related to the issuer’s offer and the sale of VDA, will be considered a “reporting entity” for the purposes of the PMLA. These organizations were also tasked with maintaining customer records for five years, even after the business closed.